Advantages of Floatation of New Shares
1. It facilitates the matter of securities to increase new finance, creation a company less dependent on retained earnings and banks.
2. The wider share ownership that results will raise the likelihood of being capable to compose rights issues.
3. The transfer of shares becomes much easier. Less of a commitment is essential on the part of shareholders. For this cause the shares are likely to be perceived like a less risky investment and thus will contain a higher value.
4. The greater marketability and thus lower risk attached to a lower cost to a market listing will lead of equity and to a weighted average cost of capital also.
5. a market-find out price because shareholders will distinguish the value of their investment all times.
6. The share price can be utilized via management as a sign of performance, particularly while the share price is forward looking, individually based upon expectations, even as other objectives measures are backward looking.
7. The shares of a quoted company can be utilized more readily like consideration in takeover bids.
8. The company may raise its standing via being quoted and it may get greater publicity.
9. Getting a quotation provides an entrepreneur along with the opportunity to realize part of his holding in a company.